Purchase Agreement 12-28-2012OITY OFCHANHASSEN
RECEIVED
CZAR 14 2014
PURCHASE AGREEMENT CHANHASSEN PLANNING DEPT
THIS AGREEMENT is made as of December 28, 2012, (the "Effective Date ") between IC
JOHN, LLC ( "Seller ") and CENTER COMPANIES, LLC a Minnesota limited liability Corporation,
and or assigns ( "Buyer ").
In consideration of this Agreement, Seller and Buyer agree as follows:
1. Sale of Property. Seller agrees to sell to Buyer, and Buyer agrees to buy from Seller
the Property (hereinafter defined) including the real property (the "Real Property "), located in
Carver County, Minnesota, PID and address below, legal to govem:
PID #251800560
7910 Dakota Avenue
Chanhassen, MN
The Real Property together with all hereditaments and appurtenances thereto are herein collectively
referred to as the "Property".
2. Purchase Price and Manner of Payment. The total Purchase Price ("Purchase Price ")
to be paid by Buyer to Seller for the Property shall be 4M''Hundred Thousand
Dollars ($540,000.00), payable as follows: 41k X&zf /boy �,
a. $1,000.00, cash, as earnest money, ("Earnest Money "), shall be deposited I
Carver County Abstract & Title hereafter ( "Escrow Company") or ( "Title Company')
within one business day of the Effective Date, in an non - interest bearing escrow
account in accordance with the terms of this Agreement. As provided in Paragraph
17, herein the Earnest Money shall be delivered to Seller and applied to payment of
the Purchase Price, unless Buyer cancels this agreement as provided herein. The
earnest money shall be refundable until all contingencies, as provided in Paragraph 3
herein have been satisfied.
b. the balance of $539,00.00 shall be payable in cash on the Date of Closing stated in
Section 4 of this Agreement.
3. Contingencies. The obligations of Buyer under this Agreement are subject to and
contingent upon each of the following contingencies:
a. Representations and Warranties. The representatives and warranties of Seller
contained in this Agreement must be true now and on the Closing Date as if made on the Closing
Date.
b. Title. Title shall have been found acceptable to Buyer, or been made acceptable by
Seller, in accordance with the requirements and terms of Section 6 of this Agreement.
C. Soil Tests. Buyer shall have determined that it is satisfied with the results of and
matters disclosed by such soil and geotechnical tests of the Property as Buyer may deemed
necessary, all such tests to be obtained at Buyer's sole cost and expense. Seller shall deliver to
Buyer all soil tests and other inspections, reviews and reports pertaining to the Property, if any, that
are in Seller's possession or control or have been previously prepared on Seller's behalf within ten
(10) days of this agreement.
d. Environmental Assessment. Buyer shall have received, on or before the
Contingency Date herein, a Phase I Environmental Assessment and Phase II Environmental
Assessment of the Real Property or such other environmental investigations as Buyer shall deem
necessary. Said Phase I Environmental Assessment and Phase II Environmental Assessment or
other environmental investigations are to be obtained at Buyer's sole cost and expense. Buyer shall
have determined that all matters disclosed by and the results of the Phase I Environmental
Assessment and Phase lI Environmental Assessment or other environmental investigations are
acceptable to Buyer in Buyer's sole discretion. Within ten (10) days after the date of this
Agreement, Seller shall deliver to Buyer all environmental assessments, reports or similar
documents pertaining to the Property, if any, that are in Seller's possession or control or have
previously been prepared on Seller's behalf.
e. Governmental Approvals. Buyer shall have obtained all required approvals,
including final site and development agreement from the City of Chanhassen as required for Buyer's
intended development and improvement of the Property with a Retail building of approximately
8,000 square feet in area, and, in addition, such other approvals as may be required from any other
governmental body having jurisdiction over the Real Property and Buyer's intended improvement of
the Real Property, all which acceptable to Buyer in his sole discretion.
£ Utilities. Buyer shall have determined, on or before the Contingency Date, that the
Real Property is served by all necessary utilities to support Buyer's intended use and improvement
of the Real Property as described in Paragraph e., above. Within ten (10) business days after the
date of this Agreement, Seller shall deliver to Buyer all documents, if any, in Seller's possession or
control and which evidence the location and/or capacity of utilities available to the Real Property all
which acceptable to Buyer in his sole discretion.
g. Project Pre - Leasing. Buyer shall have an executed leases with Buyers Tenants all
at lease rates and terms that are acceptable to Buyer in his sole discretion.
h. Construction Financing. Buyer shall have obtained construction financing at an
interest rate and terms that are acceptable to Buyer in his sole discretion.
i. Permanent Financing. Buyer shall have obtained permanent financing at an
interest rate, amortization and terms that are acceptable to Buyer in his sole discretion.
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The buyer shall have until May 1st 2014 the "Contingency Date" to obtain items "a through P
above. If any of the above contingencies have not been satisfied, in the sole opinion of Buyer, on or
before this date, then this Agreement may be terminated, at Buyer's option, by written notice from
Buyer to Seller. Upon such termination, the Earnest Money shall be refunded to Buyer and upon
such return, neither parry will have any further rights or obligations regarding this Agreement or the
Property, unless otherwise specified herein. Should Buyer fail to give written notice of termination
to Seller by the Contingency Date provided in this Section, Buyer shall be deemed to have waived
all contingencies. All the contingencies set forth in this Agreement are specifically stated and
agreed to be for the sole and exclusive benefit of the Buyer and the Buyer shall have the right to
unilaterally waive any contingency by written notice to Seller.
Seller shall allow Buyer, and Buyer's agents, access to the Property without charge and at all
reasonable times for the purpose of Buyer's investigation and testing. Buyer shall pay all costs and
expenses of such investigations and testing, except as herein otherwise expressly stated, and shall
hold Seller and the Property harmless from all costs and liabilities relating to Buyer's activities.
Buyer shall further repair and restore any damage to the Real Property caused by or occurring during
Buyer's testing and return the Real Property to substantially the same condition as existed prior to
such entry.
4. Closing. The closing of the purchase and sale contemplated by this Agreement (the
"Closing ") shall occur on or before June 1st 2014. The Closing shall take place at the Title
Company or such other place and time as may be mutually agreed to. Seller agrees to deliver
possession of the Property to Buyer on the Closing Date.
a. Seller's Closing Documents. On the Closing Date, Seller shall execute and/or
deliver to the Buyer the following (collectively "Seller's Closing Documents "):
i. Warranty Deed. A Warranty Deed conveying the Property to Buyer, free
and clear of all encumbrances, except the Permitted Encumbrances hereafter
defined.
ii. Title Policy. The Title Company shall deliver the Title Policy, or a suitably
marked up Commitment for Title Insurance initiated by Title, in the form
required by this Agreement.
iii. Seller's Affidavit. An Affidavit of Title by Seller (Uniform Conveyancing
Blanks Form No. 116 -M) indicating that on the Closing Date there are no
outstanding, unsatisfied judgments, tax liens or bankruptcies against or
involving Seller or the Property; that there has been no skill, labor or material
furnished to the Property for which payment has not been; made or for which
mechanics' liens could be filed; and that there are no other unrecorded
interests in the Property, together with whatever standard owner's affidavit
and/or indemnity (ALTA Form) which may be required by the Title Company
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to issue an Owner's Policy of Title Insurance with the standard exceptions
waived.
iv. FIRPTA Affidavit. A non - foreign affidavit, properly executed and in
recordable form, containing such information as is required by IRC Section
1445(b)(2) and its regulations.
V. Other Documents. All other documents reasonably determined by Buyer to
be necessary to transfer the Real Property to Buyer free and clear of all
encumbrances.
vi. Building Leases. All leases by Seller, written and or verbal shall become
null and void without further legal remedy or action and the building shall be
One Hundred Percent (100 %) vacant.
b. Buyer's Closing Documents. On or before the Closing Date, Buyer will execute
and/or deliver to Seller the following (collectively, "Buyer's Closing Documents "):
i. Cash. The balance of the Purchase Price, by cashier's check or wire transfer
to the account of the Title Company for delivery to Seller on the Closing
Date.
ii. Title Documents. Such affidavits of Purchaser, Certificates of Value or
other documents as may be reasonably required by Title in order to record the
Seller's Closing Documents and issue the Title Insurance Policy required by
this Agreement.
5. Proration's. Seller and Buyer agree to the following proration's and allocation of
costs regarding this Agreement.
a. Title Insurance and Closing Fee. Seller will pay all costs of providing the Title
Evidence. Buyer will pay the premium required for the issuance of the Owner's Title
'Insurance Policy. Seller and Buyer will each pay one -half of any reasonable and
customary closing fee or charge imposed by the Title Company.
b. Real Estate Taxes. On or before the Closing, Seller shall pay all real estate taxes,
and any penalties and interest thereon due and payable with respect to the Real
Property for all years prior to the year of Closing, including all deferred taxes
(including so- called "Green Acres" taxes) attributable to the year of Closing and
years prior to the year of Closing. General real estate taxes due and payable in the
year of closing shall be prorated between Seller and Buyer as of the Closing Date
based on 365 days. General real estate taxes due and payable in years subsequent to
the year of closing shall be paid by Buyer.
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C. Special Assessments. Installments of special assessments certified as due and
payable in the year of closing shall be paid by Seller on the Closing Date. On the
Closing Date, Seller shall also pay the balance of any remaining special assessments
levied or pending against the Real Property as of the date of this Agreement. Buyer
shall assume all special assessments that become pending after the date of this
Agreement. Seller shall deliver to Buyer copies of any notices of a pending special
assessment received by Seller after the date of this Agreement. Installments for
special assessments, if any, due and payable in years subsequent to the year of
closing shall be paid by Buyer.
d. Other Costs. All sewer connection fees, water connection fees, administrative fees,
costs of site grading and utility construction and any and all other costs and expenses
associated with or imposed as a condition of Buyer's development and improvement
of tf`11Y},e Real Property shall be paid by Buyer. Ru*r 5�"L� W°L Yv�dev
-tavw� V`eWnN++'ai. �t)a.` �o ke�.(i - �a�nnt%� c�V.tpvv.c..Jt Ysr�[�t4,vcwlri� j���
e. Recording Costs. Seller will pay the cost of recording all documents necessary to
place record title in the condition warranted by Seller in this Agreement. Buyer will
pay the cost of recording all other documents.
6. Title Examination. Title Examination will be conducted as follows:
a. Title Evidence. Seller shall deliver the following documents (collectively the "Title
Evidence ") to Buyer:
i) Within twenty (20) business days after the date of this Agreement, a
Commitment ( "Title Commitment ") for an ALTA Form of Owner's Policy of
Title Insurance committing to insure title to the Real Property in the amount
of the Purchase Price, issued by the Title Company. The Title Commitment
will commit the Title Company to insure title to the Real Property, but
subject to approval and filing of the Plat and also subject to the Permitted
Encumbrances, and shall include a Special Assessment Search and be
accompanied by copies of each document evidencing liens and encumbrances
affecting the Real Property_
ii) Within fifteen (15) business days after delivery of the Title Commitment to
Buyer, an ALTA/ACSM survey ( "Survey') of the Real Property prepared by
MFRA, certified to Buyer and the Title Company, and including such ALTA
certifications as Buyer shall reasonably request by written notice to Seller
within ten (10) days after the date of this Agreement.
iii) Within twenty (20) day after the date of this agreement permitted
encumbrances (Exhibit B) shall be attached hereto for Buyer review. Buyer
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shall have fifteen (15) days to make written objections as described in b.
Buyers Objections below.
b. Buyer's Objections. Within fifteen (15) business days after receiving the last of the
Title Evidence, Buyer will make written objections ( "Objections ") to the form and/or
contents of the Title Evidence. Buyers failure to make Objections within such time
period will constitute a waiver of Objections. Any matter shown on the Title
Evidence and not objected to by Buyer shall be a "Permitted Encumbrance"
hereunder. In addition, the encumbrances identified in Exhibit B hereto shall be
"Permitted Encumbrances" which Buyer has agreed to accept title to the Property
subject to. Seller will have sixty (60) days after receipt of the Objections to cure the
Objections, during which period the Closing will be postponed as necessary. Seller
shall use its best commercially reasonable efforts to correct any Objections. At such
time as the Objections have been cured, the parties shall close the transaction
described in this Agreement upon ten (10) days' written notice from Seller to Buyer,
but no earlier than the Closing Date. If the Objections are not cured within such
sixty -day period, Buyer will have the option to do any of the following:
i. Terminate this Agreement and receive a refund of the Earnest Money.
ii. Waive the Objections and proceed to close.
C. Title Policy. At closing, Buyer shall receive the Title Policy ( "Title Policy ")
pursuant to the Commitment, or a suitably marked -up Commitment initialed by the
Title Company undertaking to issue such a Title Policy in the form required by this
Agreement. The Title Policy shall ensure fee title to the Property in the name of
Buyer, subject only to the Permitted Encumbrances, and shall include such
endorsements as Buyer shall reasonably request, all to be obtained at the sole cost of
Buyer.
7. Representations and Warranties by Seller. Seller represents and warrants to Buyer
as follows:
a. Title to Property. Seller shall, on the Closing Date, have good and marketable title
to the Property, free and clear of all encumbrances except the Permitted
Encumbrances.
.E-A.
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C. Environmental Laws. To the best knowledge of Seller, without inquiry, no toxic or
hazardous substances or wastes, pollutants or contaminants (including, without
limitation, asbestos, urea formaldehyde, the group of organic compounds known as
polychlorinated biphenyl's, petroleum products including gasoline, fuel oil, crude oil
and various constituents of such products, and any hazardous substances as defined
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ( "CERCLA "), 42 U.S.C. Section 9601 -9657, as amended) have been generated,
treated, stored, released or disposed of, or otherwise placed, deposited in or located
on the Property, nor has any activity been undertaken on the Property that would
cause or contribute to (i) the Property to become a treatment, storage or disposal
facility within the meaning of, or otherwise bring the Property within the ambit of,
the Resource Conservation and Recovery Act of 1976 ( "RCRA "), 42 U.S.C. Section
6901 et seq., or any similar state law or local ordinance, (ii) a release or threatened
release of toxic or hazardous wastes or substances, pollutants or contaminants, from
the Property within the meaning of, or otherwise bring the Property within the ambit
of, CERCLA, or any similar state law of local ordinance, or (iii) the discharge of
pollutants of effluents into any water source or system, the dredging or filling of any
waters or the discharge into the air of any emissions, that would require a permit
under the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., or the
Clean Air Act, U.S.C. Section 7401 et seq., or any similar state law or local
ordinance. To the best knowledge, without inquiry, there are no substances or
conditions in or on the Property that may support a claim or cause of action under
RCRA, CERCLA or any federal, state or local environmental statutes, regulations,
ordinances or other environmental regulatory requirements, including without
limitation, the Minnesota Environmental Response and Liability Act, Minn. Stat.
115B ( "MERLA ") and the Minnesota Petroleum Tank Release Cleanup Act, Minn.
Stat. 115C. To the best knowledge of Seller, no leakage has occurred from Sellers
fuel tanks, fuel lines or dispensers since November 2007. Buyer acknowledges the
environmental report by ProSource Technologies, Inc. dated May 30th 2006, any all
information contained within this report negates Sellers obligation to disclose as
required in this paragraph.
d. Water Wells. To the best of Seller's knowledge, no water wells exist on or under the
Property or have existed on or under the Property.
e. Rights of Others to Purchase Property. Seller has not entered into any other
contracts for the sale of the Property, nor are there any rights of first refusal or
options to purchase the Property or any other rights of others that might prevent the
consummation of this Agreement.
L Seller's Defaults. To the best knowledge of Seller, Seller is not in default
concerning any of its obligations or liabilities regarding the Property-
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g. FIRPTA. Seller is not a "foreign partnership ", "foreign trust" or "foreign estate" as
those terms are defined in Section 1445 of the Internal Revenue Code.
h. Proceedings. There is no action, litigation, investigation, condemnation or
proceeding of any kind pending or to the best knowledge of Seller, threatened against
any portion of the Property.
Seller's Authority. Seller has the legal power, right and authority to enter into this
Agreement and the instruments referenced herein, and to consummate the transaction
contemplated hereby. All requisite action (corporate, trust, partnership or otherwise)
has been taken or shall be taken by Seller in connection with the entering into this
Agreement, the instruments referenced herein, and the consummation of the
transaction contemplated hereby. No consent of any partner, shareholder, trustee,
trustor, beneficiary, creditor, investor or administrative body is required or, if
required, has been obtained or will be obtained prior to closing. The persons or
entities executing this Agreement on behalf of Seller have the legal power, right, and
actual authority to bind Seller to the terns and conditions hereof.
j. Pending Assessments. Seller has received no notice of any pending special
assessments which may be levied against the Real Property.
k. Access. The Real Property abuts on and has direct vehicular access to a public road,
and Seller has no knowledge of any fact or condition which would result in the
termination of such access.
1. Seller will indemnify Buyer, its successors and assigns, against, and will hold Buyer,
its successors and assigns, harmless from, any expenses or damages, including
reasonable attorneys' fees, that Buyer incurs because of the breach of or material
inaccuracy in any of the above representations and warranties, whether such breach is
discovered before or after Closing. Each of the representations and warranties herein
contained shall survive the Closing for a period of two (2) years, after which they
shall terminate and Seller shall have no further liability for the breach thereof.
Except as herein expressly stated, Buyer is purchasing the Property based upon its
own investigation and inquiry and is not relying on any statement or representation of
Seller, any agent or representative of Seller or any other person and is agreeing to
accept and purchase the Property "as is, where is" subject to the conditions of
examination herein set forth and the express warranties herein contained.
8. Condemnation. If, prior to the Closing Date, eminent domain proceedings are
commenced against all or any part of the Property, Seller shall immediately give notice to Buyer of
such fact and at Buyer's option (to be exercised within thirty (30) days after Seller's notice), this
Agreement shall terminate, in which event neither party will have further obligations under this
Agreement and the Earnest Money shall be refunded to Buyer. If Buyer shall fail to give such notice
then there shall be no reduction in the Purchase Price, and the Seller shall assign to Buyer at the
Closing Date all of Seller's right, title and interest in and to any award made or to be made in the
condemnation proceedings. Prior to the Closing Date, Seller shall not designate counsel, appear in,
or otherwise act with respect to the condemnation proceedings without Buyer's prior written
consent.
9. Broker's Commission. Seller and Buyer represent and warrant to each other that
they have dealt with no brokers, real estate agents, finders or the like in connection with this
transaction, other than the Listing - Development Agreement between Seller, Buyer and Lotus Real
Estate Services, Center Companies, LLC and agree to indemnify each other and to hold each other
harmless against all claims, damages, costs or expenses of or for any brokers' fees or commissions
resulting from their actions or agreements regarding the execution or performance of this
Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such
fees or commissions incurred by the other party, including reasonable attorneys' fees.
10. Assignment. Buyer may assign its rights under this Agreement without Seller's
prior written consent if Seller
11. Survival. All of the terns of this Agreement will survive and be enforceable after
the Closing.
12. Notices. Any notice required or permitted to be given by any party upon the other
shall be in writing and is given in accordance with this Agreement if it is:
i) delivered personally to Seller or Buyer,
ii) mailed to either Seller or Buyer in a sealed envelope by first class United
States Mail; or
transmitted by facsimile;
to the addresses or facsimile numbers stated below:
If to Seller:
With a copy to Seller's Attorney:
IC John, LLC
Ivan C Johnson
Fax No.
If to Buyer: Ben Merriman
Center Companies, LLC
2025 Coulter Blvd. Suite 215
Chanhassen, MN 55317
Fax No. 952 -474 -4826
With a copy to Buyer's Attorney:
Fax No.
Notices that are personally delivered shall be deemed effective upon delivery. Mailed notices shall
be deemed effective two (2) business days after the date of mailing. Notices that are given by
facsimile shall be deemed effective upon confirmation of receipt of facsimile transmission. Any
party may change its address or facsimile number for the service of notice by giving written notice
of such change to the other parry, in any manner above specified, ten (10) days prior to the effective
date of such change.
13. Captions. The paragraph headings or captions appearing in this Agreement are for
convenience only, are not a part of this Agreement and are not to be considered in interpreting this
Agreement.
14. Entire Agreement; Modification. This written Agreement constitutes the complete
agreement between the parties and supersedes any prior oral or written agreements between the
parties regarding the Property. There are no verbal agreements that change this Agreement and no
waiver or modification of any of its terms will be effective unless in a writing executed by the
parties.
15. Binding Effect. This Agreement binds and benefits the parties and their successors
and assigns. "
16. Controlling Law. This Agreement has been made under the laws of the State of
Minnesota, and such laws will control its interpretation.
17. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to
terminate this Agreement by giving written notice to Buyer in accordance with Minn. Stat. 559.21.
If Buyer fails to cure such default within thirty (30) days of the date of service of such notice in
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accordance with Minn. Stat. 559.21, this Agreement will terminate, and upon such termination
Seller will retain the Earnest Money as liquidated damages, time being of the essence of this
Agreement. The above provision for termination of this Agreement and retention of the Earnest
Money by Seller does not preclude Seller from electing to seek and recover from Buyer damages for
nonperformance and/or specific performance of this Agreement, provided Seller has not completed
termination of this Agreement in accordance with the provisions of this Section 17. ' If Seller
defaults under this Agreement, this provision does not preclude Buyer from seeking and recovering
from Seller damages for nonperformance and/or specific performance of this Agreement, provided
Seller has not completed termination of this Agreement in accordance with the provisions of this
Section 17. In the event of any proceeding to enforce any of the terms, covenants or provisions of
this Agreement, the prevailing parry in such proceeding shall also be entitled to be awarded its
reasonable attorneys' fees.
18. Mutual Indemnification. Seller and Buyer agree to indemnify one another against,
and hold each other harmless from, all liabilities (including reasonable attorneys' fees in defending
against claims) arising out of the ownership, operation or maintenance of the Property for their
respective periods of ownership. Such rights of indemnification will not arise to the extent that (a)
the party seeking indemnification actually receives insurance proceeds or other cash payments
directly attributable to the liability in question (net of the cost of collection, including reasonable
attorneys' fees) or (b) the claim for indemnification arises out of the sole act or neglect of the party
seeking indemnification. If and to the extent that the indemnified party has insurance coverage or
the right to make claim against any third party for any amount to be indemnified against as set forth
above, the indemnified parry will, upon full performance by the indemnifying party of its
indemnification obligations, assign such rights to the indemnifying party or, if such rights are not
assignable, the indemnified party will diligently pursue such rights by appropriate legal action or
proceeding at the indemnifying parties' expense and assign the recovery and/or right of recovery to
the indemnifying party to the extent of the indemnification payment made by such party.
19. Counterparts. For the convenience of the parties, any number of counterparts of
this Agreement may be executed and each such executed counterpart shall be deemed an original,
but all such counterparts together shall constitute one and the same agreement.
20. Exhibits. All exhibits referred to in this Agreement are attached to and shall be
considered a part of this Agreement.
21. Severability. Should any one or more of the provisions contained in this Agreement
for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect the validity or enforceability of any other provision of
this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
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Seller and Buyer have executed this Agreement effective as of the date first written above.
Dated: try 1, +3 _2011 SELLER
IC John LLC
By
IvanC ohnson
Its: l
By
Carol Johnson
Its:
Dated:
AA 201J BUYER
Center Com panes, LLC, and or assigns
B
errnnan
Its: President
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EXHIBIT A
Legal description to be attached by Seller.
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EXIIIBIT B
To be attached after Title Update, see 6. Title Examination a. Title Evidence iii
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